As we approach the end of 2022, a year in which we have seen the dark spectre of war once again in Europe, one of the most disastrous economic budgets in modern history and three UK prime ministers, you might be wondering what else could possibly happen in 2023!

 

When it comes to predicting what’s around the corner for logisticians and warehouse managers, there’s possibly more certainty. Eric Carter, Solutions Architect at IAOAI Software shares his top predictions for warehouses in 2023.
Money may be tight, but automation will accelerate

 

Despite the cost increases and financial pressures in every industry, companies cannot afford not to invest in automation and new technology in 2023. There may be risks involved but those companies that invest in automation technology will prosper in the long run and the benefits will be seen well beyond the current economic downturn. As economists have always advocated, downturns are opportunities to outmanoeuvre rivals and make smart investments. Your people, your processes and your products are the building blocks of your business and are worth the investment – we refer to them as the 3 Ps of warehouse management.

 

Supply chain uncertainty will continue

The year began with supply chain disruption and it’s likely many of the supply chain issues we’ve come to regard as par for the course will continue. Expect delays at ports, strike action, raw material shortages and more. China, the world’s last major economy still enforcing strict zero-Covid measures has only recently started to ease back away from these as the dire consequences to the economy that these lockdowns produce is finally being recognised. It’s guaranteed that shortages in some areas will continue and be exacerbated as the winter in the northern hemisphere closes in. New trends like just in case planning and lumpy inventory management will remain as companies hedge their bets and over order on stock to see them through difficult periods. A Warehouse Management System (WMS) will help ensure inventory management is as accurate and efficient as possible, essential when stock levels are running higher than the norm.

 

Increasing emphasis on ESG from consumers, investors and workers

COP27 may have been regarded as a disappointment in terms of tangible agreement from world leaders, but having a clear green strategy is an absolute must for every business. The companies that prioritise investing in renewables, moving towards net zero and having more sustainable product alternatives are the ones that will attract the greatest loyalty – from customers, investors and employees. Using a WMS system can make a big contribution to net zero targets and offers many other benefits too.

 

Warehouses need to flex and flow

When times are tough, we all need to be flexible and adaptable – warehouses are no exception. Right from the numbers of employees needed at short notice for order fulfilment, to the amount of space required for incoming stocks, warehouses need to be flexible and agile. In 2023, being agile means having the bandwidth and resilience to adapt quickly to sudden changes, respond favourably to emerging trends and have enough buffers in place to cope with negative developments. When it comes to becoming as flexible as possible, one of the best ways to sustain the agility needed for success in 2023, will be with a WMS solution.

 

Labour shortages drive growth in warehouse automation

One of the most immediate impacts of Brexit in warehousing has been a contraction to the available workforce. It is more expensive to recruit operatives and this trend will continue in 2023. It is another major reason why levels of investment into warehouse automation are rising so quickly. Hiring in extra labour during busy periods is a sunk cost, whereas once the right technology is in place, the potential operational savings can continue indefinitely. One area that is especially likely to see expanded activity is inbound automation, traditionally a very labour-intensive aspect of warehouse management. In 2023, companies will be looking to reduce the traditional reliance on people, speed up the turnaround of incoming goods and make inbound logistics processes much more efficient.

 

Compact and bijou warehouses

As anyone who has ever had a small bedroom will appreciate, orderliness is the key to managing in a confined space, and the same is true of warehouses. One long term trend set to continue is for smaller warehouses in more densely populated urban areas. It means companies – especially e-commerce providers – can offer micro-fulfilment services, shorter delivery windows and a generally more responsive service. These offerings will be essential competitive differentiators in 2023 and using a WMS ensures that locations are tightly controlled and higher stock volumes can be stored in a smaller space.

 

Data driven warehouse management

The Covid pandemic continues to shape warehouse trends, even although life has largely returned to ‘normal’ again. What Covid did was alter consumer behaviour permanently, accelerating the growth of ecommerce and digital transformation. Both these initiatives are effectively powered by data. Warehouses rely on accurate data to ensure visibility, and digitalisation projects join the dots to ensure that information can be shared easily among all the key connections within the supply chain. Inside the 4 walls is where a WMS adds value, offering the ability to model operational performance using real time data. As data science becomes more sophisticated, thanks to machine learning and AI driven warehouse management, expect more data and insight gathering in 2023.

 

Cybersecurity extends to the warehouse

The threat of a cyber attack is now so high that it is less a case of if an attack takes place, as when. Companies need to expect that they will be compromised and have watertight processes in place for recovery. The same applies to warehousing and we expect warehouse managers to play a far more active role in formulating cyber resilience strategies in 2023. Hackers are increasingly on the look out for new targets and with so many businesses reliant upon e-commerce operations, the warehouse is a prime target. Expect to be playing a central role in business disaster recovery planning.